ones who pursue an independent policy revelation of the head of the european central bank, christine lagarde. listened to our pranksters. for more than half a century , he has been creating masterpieces for the best scenes, and his work delights the audience with the most prestigious awards. legendary theater artist. boris meser. russia did not receive a response regarding the investigation into the circumstances of the terrorist attacks on the nord stream gas pipelines , vladimir putin said this, noting that moscow offered copenhagen various options and work together and form an international commission. however, the danish authorities are pulling with a reaction. why remind has already been explained by an american journalist. all traces of sabotage are carried out by the united states, but in the west they prefer to remain silent about this and put forward their own versions, including them, the russian leader commented in an interview with our colleague pavel zarubin on mikhail akinchenko's report. whoever was the organizer of the terrorist attack on the nord stream gas pipelines, he cle

you are christine lagarde.e table and told him what -- told each other what they think of the situation. lisa: i would totally plant. -- punt. we don't know how this is playing out. the financial market is completely stable and the system is stable. we will provide every facet to make sure it is. we need to see it play out and then they wait and do that. tom: this is the dynamic analysis we have. going back 20 years here on "bloomberg surveillance" to richard clarida. dominic konstam in a moment. devin ryan talking about the securities analysis at the moment. these are people that can deal with the ambiguities, the choices people have to make. jonathan: let's get to those conversations in a moment. for those just tuning in, the equity market is negative by about .1% on the s&p 500. even with a major move on credit suisse. nasdaq positive yesterday. .2%. the two-year, the 10-year. the two-year, 3.99 . basically unchanged on the 10-year. the belief this morning, a real belief that some people looking to the ecb t

your from madam lagarde?enda: a very simple message that inflation is still too high and needs to be brought down. that is why they went ahead with a 50 basis point rate hike despite the turmoil in the banking system. it seems as though the ecb believes they can navigate this path where they have the tools and christine lagarde said this, they have the tools for financial stability, they are willing to do whatever they need to which is separate from the inflation debate which of course, with core inflation where it is, means interest rates have to keep going up. she said the vast majority of ecb may officials work on this move. she did not get any indications as to where they're going from here with the interest rate path did some people interpreting that as meaning the ecb is on pause from this and on the nonetheless, knowing the wider market fluctuation, the banking scare with credit suisse and the u.s., the ecb plowing ahead with 50 basis points was a surprise to many observers. tom: and implications for t

ah, christine lagarde. really.onnection is very tight and the inflation that is now in the european union. it is very densely caused in fact by the problems that arose as a result in the economy as a result of a special military operation. but uh, i think it's important to emphasize that christina is lart. eh, honestly admits that she does not succeed. not only in general, in principle, in the european authorities and the american authorities, it is not possible to win with sanctions. that's why our oil is bought? yes because she's cheap. uh, all countries want to have economic growth. economic growth is provided in the modern world due to cheap energy. alexander mikhailovich pasechnik is always in touch with us, we are glad to welcome you, and the oil price ceilings, just i would like to talk with you and hear a couple of explanations for this fact. generally. we see that our energy sector is not working, our oil companies are successfully adapting to this story. this is first of all. of course, the originals, yes

alix: that was christine lagarde, president of the today.hat takes us to the question of the day, you have a 10 handle, and that takes us to, what is the u.k. inflation message to the fed? joining us for her take, global equity cio of allianz global investors, virginie maisonneuve. what is the message to the fed? virginie: i think it clearly deals with the roots of inflation and the number that we just saw in the u.k. is based on food and rent. in the u.s., it is about wage inflation, and because it is a large component in the u.s., over 70% of costs is wages, so it is the same but it is not the same at the same time. the key is to think about what our central banks going to do? it is a balancing act between financial and priced abilities. the source of creation will be deferred and we expect inflation to come down in the u.k. thank you . guy: the bond market expects cuts by the end of the year, which means the equity market is getting excited about cuts. what is the danger here for the equity market? is it that the bond market is wrong that

i will keep mentioning the comments we got from president lagarde. president lagarde was punchy.price and financial stability. she said we will not entertain any trade-offs from our primary objective. >> we have to ask the question, is the inflation picture that different, actually hotter in europe? we were talking about the opposite six months ago. so are they going to send a signal to the fed or not? today at 2 p.m., we get the fed rate decision. this is the first time in the past year that we have not had at least one full rate hike baked into the pricing in markets ahead of the meeting. to me, this is an interesting conundrum. 2:30 p.m., that press conference will be interesting. does he stick to the script? if he does, does that mean there is some sort of consensus on the fomc? 2:30 p.m., janet yellen should be testifying before the senate. how many questions will we get about first republic bank? what the type of insurance is to all deposits, what is the willingness of politicians to back that? we have heard some reluctance on both sides with even democrats feeling a little

how do you expect christine lagarde to navigate this?n: i think lagarde and her counsel will be concerned about what it means, the short-term implications of the crisis. the markets seem to be regaining some poise but as we said, this could be simply because of short covering. if you look at the german bonds, that is a -- market. yields are back up today. that should give christine lagarde and the governing council a lot of confidence. they seem to be adjusting well and reacting quickly out of what is coming out of switzerland. i think they may think that look, this is well telegraphed rate path that we have been on. inflation is still a problem. there does not seem to be any systemic issue at this point. i think those other challenges that lagarde will be passing this afternoon. francine: confidencefrancine: is regaining. but overall confidence seems still pretty fragile. does christine lagarde, the ecb need to do some kind of credit facility? do they need to open to reassure the markets for whatever comes next? if it's not credit suiss

. >> thank you president lagarde. i would like to turn to the german weekly. >> i would like to ask a question concerning the data driven decisions. isn't there a conflict of goals between price stability and financial stability? and to what extent do you consider slowing down the pace of rate hikes because of financial stability? do you have to slow it down because of financial stability? that is my first question. the second, were you surprised by the financial problems we saw -- we see now in the u.s. and we saw last year with pension funds in the u.k.? was this a surprise or is it something expected perhaps bite monetary policy experts? -- bite monetary policy experts? >> let me be clear. i believe there is no trade-off between price stability and monetary stability. we are addressing the price stability issue by raising interest rate by 50 basis points which is what we had intended, and because inflation was projected to remain way above our target and for too long. separate from that, we are monitoring market te

madame lagarde coming in with 50 basis points. that was the hike from the ecb, but dropping the messaging around forward guidance for rate hikes. pointing to high inflation but also saying they have the tools at their disposal to address any risks around the banking sector. games are strengthening now you can see that reflecting in the cap for 1% gain in the front next, 67 points as the upside. the ftse 100 gaining .8%. let's switch over to cross asset. reminding you of what happened in the asia session because you saw decent upside for asian banks on the back of the action that we saw out of the u.s.. also, tech sector rallied on the back of some intelligence -- artificial intelligence enthusiasm -- linked to baidu. inning 4.5%. nasdaq futures pointing to further upside. you are looking at gains of more than 5% as things stand for the nasdaq this week on expectations that rates will come and slightly lower and increased liquidity calls coming through on the federal reserve. euro-dollar 1.06. supporting games of .5% tying into the

and the message that was delivered from christine lagarde.y peter brat, praet, was you expected we got 50 basis points from the e.c.b. today. can i take that 50 basis points as a signal that the e.c.b. is not that concerned about the financial instability that we are currently seeing? peter: it's a bit more complicated. you remember in february the e.c.b. was communicating that they would go for 50 except in a quite extreme scenario. so if they would not have done the 50 basis points, the markets would have concluded that the e.c.b. knows something very bad about the economy in general or the banking system. i think the way they arrive to decide for 50, but at the same time they stop giving strong guidance on interest rates. which i think was too much in the previous meetings. so they insisted very much on the data dependencies an monitoring closely what happens in the financial markets. alix: what's so difficult, we ended the last conversation on this, peter, you have liquidity issue, solvency issues and confidence issue. the financial syste

kathleen: important for christine lagarde to make that clear.ng to the vice president of the ecb, saying there are some banks that are vulnerable, however under their region he thinks they are resilient. in terms of the rate hike and what may happen next, it is interesting that the ecb in its policy statement took out language about future rate hikes. past several meetings they have been indicating the path was forward towards more rate hikes. bloomberg economics thinks even if the markets are pricing out, there is 50 basis points more of rate hikes to come because inflation is still so high. the latest report out of germany, the biggest economy in the euro area, was 9.3% year-over-year, up from 9.2%. that is why christine lagarde signaled we are still fighting inflation. shery: our global economics and policy editor kathleen hays. get a roundup of all the stories you need to know in today's edition of daybreak. bloomberg subscribers, go to dayb . this is bloomberg. ♪ shery: ck hutchinson profit rises in 2022. major deals helped the conglome

lagarde says they will have inflation at 2.1 in 2025 is that a noble concept?d with a lower multiple period okay this is a more uncertain time than a week ago or two weeks ago and i should pay less for risky assets full stop so explain to me why i should want to play a higher price than last week for any bank >> well, if you think they're cheap and sold off too much and the u.s. government and federal government will come in and made it clear they're act swiftly and decisively to clean this up. >> in the 2 by 2 grid of competency and honesty where are we you don't want runs on multiple banks. in reality do you feel better about the banking system than a week ago >> do you? you don't. >> how could you i only have a sample size of 150 but everyone i know is moved and running out of one of the banks that was a problem whether in their private equity or personal life or business name one person, i'm cool, going to keep it and let it ride and see what happens. >> it would be worse if yields were doing the opposite, night. >> right less losses now than a week ago. gr

the other important message from lagarde and potentially from powell if they do keep raising rates toious about inflation. we're not backing off from that. we don't necessarily see anything too worrisome that would cause panic and make us change course. it inspires confidence she said the european banking system looks safe. we'll act if we need to and the markets worry if the central banks see something they don't and if there are questions whether it's safe or not, the fact she's not blinking on this could signal confidence. >> you can look at ratios that argue maybe it's not -- the house is not on fire >> it's a signaling. >> the dow up 160. to seema moody with a news update >>> microsoft says it is bringing the power of next generation artificial intelligence to the work place with the introduction of microsoft's 365 co-pilot it says users will be able to use natural language prompts with its existing applications like word, excel and power point to create first drafts, organize data for analysis and enhance presentations. microsoft has already integrated open ai technology into it

we lead up to that speech from adam lagarde in about 30 minutes time. what she has to say about whether there's a contradiction between price stability and financial stability. >> let's dig deeper into some of the sectors. out of 20 industry groups about half of them are on the downside. i have banks, travel and leisure , retail on the way up. what i would point to is the fact we had repricing when it comes to boe expectations, at tomorrow by 25 basis points on the back of inflation. this is the picture overall for the indices but we could see a break away from the ftse compared to some of the other forces. >> that could be that distinction at play given this coming through. the fed though as we touched, policymakers want to balance their inflation fight with that recent turmoil in the banking sector. this as we count down to the policy decision later today. let's bring in valerie. what do we expect today given the conundrum facing the fed. >> a big conundrum. they will likely meet market expectations going for a 25 basis point hike but boy have things

now the president of the european central bank is christine lagarde. short time ago addressing concerns over the woes of the european banking sector. the euro area banking sector is resilient, with strong capital and liquidity positions. in any case, our policy tool kit is fully equipped to provide liquidity support to the euro area financial system if needed, and to preserve the smooth transition of monetary policy. that is christine lagarde. here's our business correspondent marc ashdown. credit suisse in the headlines for all the wrong reasons again. they are keen to reassure investors or listen hand and that they will act if necessary. listen hand and that they will act if necessary-— if necessary. that is true, if you no back if necessary. that is true, if you go back to _ if necessary. that is true, if you go back to the _ if necessary. that is true, if you go back to the start _ if necessary. that is true, if you go back to the start of- if necessary. that is true, if you go back to the start of the - if necessary. that is true, if you | go back

some lines through from the european central bank and madame lagarde. she spoke spanish tv. it is inching to see what media she does. she basically said the ecb race and hikes may need to continue beyond march. she has telegraphed a 50 basis point hike in march but there is a lot more going on especially after the inflation print from sprain and france higher than expected. tom: and how much concern about the sovereign parts of the eurozone as rate hikes are priced in. yields on the benchmark has moved higher two basis points. the two-year in germany is not a peripheral but the benchmark has seen a 70 basis point move higher. christine lagarde sees no signs of recession on the horizon for the euro zone for now. francine: investors see the rate being raised to a peak. in the next hour we will speak to the chairman of societe general. this is bloomberg. ♪ >> this is "bloomberg surveillance: early edition," with francine lacqua. francine: good morning and welcome to "bloomberg surveillance: early edition." i'm francine lacqua in

investors are on the fence of predicting a half-point hike from christine lagarde.'s check on the markets. some modest relief. the question is for how long that lasts. we will be zeroing in on the stock trading around credit suisse and its bonds when those start and open for trade. for now, getting a recap of the asia session. the msci asia-pacific currently down 1%. the banking sector in focus out of tokyo and hong kong. pressure remains for the counterparty risks. futures in the u.s. pointing to modest gains of .3% after the losses on wall street yesterday. european futures gaining almost 2%, the context being almost down 3% yesterday. there is the swiss seen that you can see, gaining versus the u.s. dollar on the back of the news that the snb will be providing funds and liquidity to credit suisse. in an attempt to stem that crisis of confidence, credit suisse has arranged to borrow up to 50 billion francs from the swiss national bank. this sends shockwaves across the global financial system with banks and regulators looking to cut out counterparty risks. let's br

who forced lagarde to make such revelations will tell emil mersaev. the fact that the ukrainian crisis is costing a lot, the astronomer of europe has to admit, even the most ardent sponsor of the kiev regime, the chairman of the european central bank, christian lagarde. being confident that he is talking with vladimir zelensky, but in fact with russian pranksters vladimir kuznetsov and alexei stolyarov, he crumbles into revelations, they say. we did not expect that the rise in prices would become so long and so ubiquitous. we have problems with inflation due to problem areas that we have not been able to improve. after the end of the pandemic. prices first rose only because of the cost of energy, and then gradually due to rise in price of fertilizer inflation. everywhere. we thought that it would be temporary, but in the end , prices rise much longer and much more strongly, and inflation throughout the eurozone is absolutely right in this. a little more than ten percent most of all from anti-russian sanctions, paradoxically, it was those who lobbied t

christine lagarde is among policy officials who will speak today at the ecb in its rot -- watchers conference in frankfurt. breaking lines coming through on ubs. ubs will buy back some balin notes post credit suisse deals. these are the ones that have been seen totally wiped out after the swiss reglet tory framework. but this are ubs own bail and notes. to give you the specific language, it says the issuer has decided to launch the exercise as a result of prudent assessment of recent developments in the issuer's long-term commitment to the credit investors. trying to restore confidence in these specific types of notes were wiped out because of the new regulatory framework. these are two different notes that they will buy back. they will tender their notes for cash. we will keep on top of those lines as they come through. meanwhile, the focus stays on ubs, stays on credit suisse, but we now have to incorporate the fed where they will be deciding what is more important, is it financial stability, is it inflation? do they have to forsake one for the other? this is the most uncertain we have been

we heard from madame lagarde yesterday speaking in the parliament in brussels. the european parliament suggesting there is no trade-off between financial stability and the fight against inflation. the pound at 1.22. we will hear from the chancellor, jeremy hunt, later today. brent at $73 a barrel, dropping 0.8%. over the year, losses of around 36% the last 12 months for brent. discussing the commodities picture later in the show. gold is up 0.2%. it's back below 2000 amidst some modest relief across the markets. let's get our reporters from around the world. from credit suisse's riskiest bonds being wiped out to the fdic's insurance to all bank deposits. in the latest fallout to credit suisse's at one saga, bloomberg learned that invesco and pimco were among those that had the bonds wiped out by the ubs takeover. let's get more with valerie tytel. what do we know about the losses of these at1 holders? valerie: we heard yesterday that pimco saw a $3 million loss from these at1's. pimco is a big holder of them and also blackrock and invesco, known to be decent siz

what exactly did christine lagarde say, or perhaps what did she not say?made it clear that from their view, the eurozone banks are on sound footing, there are pressures in the region, we have seen bank stocks get hit, various credit securities get hit around this, but she said they are monitoring the situation closely. they are constantly in contact with everyone and at this point, they think they can go ahead with this move. she also made it clear that not only are they in better shape than what the swiss national bank has to deal with, they are in better shape than what the fed has to deal with, especially when it comes to svb. >> we have strong supervision. we have strong capital. and we have stolid -- solid liquidity positions. as the vice president said, exposures are not concentrated and based on the work that has been conducted by the ssm, we do not have a similar occurrence as the one that occurred in california. kathleen: madame lagarde wanted to make sure everyone understands that they are not like that. in terms of what they did do when she refe

christine lagarde is giving testimony in front of the european parliament now. inflation is projected to remain too high for too long. she is repeating that line from the press conference where the ecb raised by 50 basis points. "interest rates remain our primary tool. future moves depend on data." she is reiterating to the european parliament what she said last week, but it sets up the question -- i wonder whether or not to answer the question on do we have a banking crisis. we have to wait for wednesday. the fed and hearing notice more on what is -- the fed in it. notice more what is happening with the financial system than the rest of us. let's answer the question with better minds than alix's and mine. we are joined by sonali basak in new york and francine lacqua, doing fantastic work in zurich and bern over the weekend. francine, i will come to you in zurich. ubs is trading higher. it was lower this morning and tracking higher since then. is the credit suisse crisis now over? francine: it seems it is certainly not as over as many would have liked this morni

francine: coming up christine lagarde consists that eurozone banks are in a healthy position despite turmoil in the global financial system. more on her response next. this is bloomberg. ♪ >> i welcome the swift action and the decisions taken by the swiss authorities. these actions are instrumental for restoring orderly market conditions and ensuring financial stability. let me also remind that we are monitoring market involvements mostly, and stand ready to respond as necessary to preserve price stability and financial stability in the euro area. the euro area banking sector is resilient with strong capital and liquidity positions. in any event, the ecb's policy toolkit is fully equipped to provide liquidity support to the euro area financial system if needed. tom: that was ecb president christine lagarde expressing her confidence in the european banking system. francine: let's bring in robert murphy from edison institutional services. do you think the report -- the repercussions are relatively small and contained or could this really have some domino effect in a broader systematic

i don't think lagarde was trying to make a point.think lagarde was in a place where, what i thought you were going to say, europe has a higher inflation rate, not coming down as fast as the united states, and is further behind the fed -- is behind the fed in terms of where its rate policy is. i think she did that 50. the market was giving it to her. she took it and it worked out okay for her. but, remember, she got rid of the guidance and that was the key to it. >> steve, what sorts of key language changes are you going to be looking for? does he finally say soft landing is completely off the table? he always says there's room for one. i wonder if he's willing to come out and say no, we just don't know. >> i think the word -- itch the word uncertainty on my bingo card that will be a big one. i had bumpy last time when it came to inflation. i won that one as well. i think that will be a big part of what he says. he'll talk about financial conditions tightening or the possibility of it. i think he'll talk about confidence in the bankin

christine lagarde participated this morning. told, we do not see a trade-off between price stability and financial stability. the ecb will take care of both repeated this idea that our baser stronger, well-regulated, they have the capital and liquidity. i was told by two people there that the message was one of reassurance. they walked out of it feeling relief. the idea is that this was a shaky day but it is a friday. may be people want to close positions and wind down and monday we start on a new know. but the impression they got from christine lagarde was one of let's be calm, it has been turbulent but let's keep calm. alix: that is what prompted olaf scholz talking about deutsche bank. what'd you make of that on the political side? maria: you are so right to point to that comment from the german chancellor because he very rarely, i don't have a recent recollection of a politician who comes out specifically comments on the record on an equity move, commenting specifically on a company. that tells you a lot about the sentiment

ecb president christine lagarde was unaunambiguous in the comme last month it has rebounded back up to 50% from 25% spin a coin, everybody the yields on the european bond markets are 2.8% in spain, 3.3% as karen pointed out. 1.6% for the italian paper annette, a very interesting question how big a crisis do we have in the european banks despite what the ecb has done maybe they have jitters behind you? >> reporter: i think there is, of course, a big discussion in the governing council here at the euro ecb clearly, if you look at what already happened when it comes to the rhetoric, is the periphery, italy and potentially also spain, is not in favor of hiking rates as fast as the core of the euro area which does want to hike rates. we have the fact with the austrian central banker who wants to move rates faster than the itae tatalian central bank. the concern is the tightening could trigger a very fierce recession in their countries and real estate crisis we should talk about real estate the financing or the maturity of the mortgages outstanding is very different from every jurisdiction h

inflation fears take hold as european equities slump and bond yields hit highs lagarde says there coulde enough hike this month >> i expect the 50 basis point hike for march and it looks like also for the upcoming meetings in may and after may >>> activist investors seek to spin off hsbc asian business demanding a vote at the meeting in may. >>> beijing holds up arms attempts to offload china and sending shares sharply lower. >>> and elon musk master plan fails to create a spark. tesla stock slides as he doesn't provide details as production costs are slashed in half. >>> good morning warm welcome to today's program. we are looking at muted trade in europe this morning. stoxx 600 off to a slow start. down .80 points right now. this is following a tough day yesterday. the stoxx 600 pulled back 0 .7% hitting a three-week low this came after a significant selloff in bond markets sparked by regional german inflation which showed acceleration in price growth and set the scene for the eurozone cpi that is coming out at 10:00 a.m. london time. that is a key focus for investors. if we get a hot

we came out of yesterday and everybody watched the performance of madame lagarde at the conference and ecb meeting announcement i think a lot of people were pleasantly surprised there was nothing in the communication that caused confusion, shall we say, in the way that the market analyzed the statement that hasn't always been the case from the central bank meetings whether it is the ecb or the bank of england, of course this time around, it seemed to be clean 50 basis points. we have an eye on the banking situation. let's move on. we don't think there is a problem. so we got the market rally we got the rebound we got the sigh of relief. we got the breath of confidence in equity market trade this, i'm not sure, necessarily helps here interestingly, there was a bank of japan announcement saying there would be a meeting there to talk about the banking markets and banking situation post what we have seen in the united states and with credit suisse we have been talking all morning about what the reality is of the medium-to-longer term risks for the banking sector i would not be surprised at

rate hike like the ecb has, so for the most part, i think they might try to pull off what president lagarde did yesterday, which is deliver a height but keep their options over so i dovish hike if you will so markets are not expecting future rate hikes unless there is more stability in the financial system. katie: i think it's telling when you look at the back and forth we saw with barclays in their fed call. as friday, a week ago, feels like a literal year ago, after the jobs report we got, they changed their fed forecast to call for a 50 basis point rate hike in march but monday they scrapped the call entirely writing, based on the financial turbulence over the weekend and signs of a sudden intensification of risk aversion, we believe a 50 basis point hike is off of the table for next week and the decision point will be between 25 basis points hike or a pause and we believe the most likely outcome will be a pause. that is the barclays view and that back-and-forth nicely encapsulates the indecision here. what is your view? katie: good to be with you. -- tony: good to be with you. i think t

suffering from anti-russian sanctions, admitted the head of the european central bank, christine lagardescow, according to the words opposite the sanctions , suffered a successful one and was able to reorient trade to the east. actually, it's not politically correct by western standards , the heads of the central bank forced vladimir zelensky to be frank. she thought so. well, who really is? you probably already guessed. the fact that the ukrainian crisis is costing the countries of europe dearly has to be recognized, even by the most ardent sponsor of the kiev regime , the chairman of the european central bank , christian lagarde. being confident that he is talking with vladimir zelensky, but in fact with russian pranksters vladimir kuznetsov and alexei stolyarov, he crumbles into revelations, they say. didn't expect prices to rise becomes so long and so omnipresent. we have problems with inflation due to problem areas that we have not been able to improve. after the end of the pandemic. prices first rose only because of the cost of energy, and then gradually due to higher prices for fe

christina lagarde. in conversation with famous pranksters and lexus. they called her on behalf of ukrainian president volodymyr zelensky. lagarde was very unhappy that the russians were coping with external pressure. high water, in some regions of russia, is already approaching residential buildings , we are talking about settlements that every spring suffer from a strong leash in the voronezh region, according to the ministry of emergency situations, 11 bridges have already been flooded. what is the situation by this hour gleb starodubtsev will tell us joins greetings tell us the details and what do meteorologists say about such forecasts? hello, alexandra, but i’ll correct you a little at this hour, 13 low-water bridges have already been flooded, and in the village of kala in the city of kalach, if not sumerian, near voronezh, the water approached residential buildings. in total , about a hundred household plots and fun were sunk. also , five pontoon bridges were built across the don river , this is the main river of the region, the water level did n

present lagarde pre-committed to 50.i keep saying this, a week is a long time for this chairman. we could today, we were talking about do we go up? how low is the bar? it is monster high. tom: maybe we will get a test here in a moment of 1.68. lisa, what have you learned this morning? lisa a.: let bank contagion or fear of it is anything but gone. stability is off the table. we are now pricing in 100 basis points for a cut in the next 12 months. how much do we get a response from central banks this question of we still have an inflation problem, otherwise we would be talking about cpi, ppi coming up in half an hour, retail sales, the market that is running hot. help do you deal with the inflation problem at a time when something seems to be breaking? tom: let's break to the data check. four big figures earlier, 27.47. jonathan: credit suisse down pretty 5%, back down to 1.68 in the last five minutes. in europe, the stock is down 13%. bnp paribas is down 11% or 12%. a week ago, we were talking about this being the trade s

now they've also got banking issues, namely credit suisse and the contagion there. >> christine lagarde has a more difficult problem, especially since the ecb to a certain extent has painted itself into a corner by communicating in advance that it anticipates hiking rates 50 basis points tlechbt done it yet and i think they should have the responsibility to take a different tack and only hike rates 25 basis points, maybe even hit the pause button. keep in mind that inflation in europe is a different beast. it's a much more driven by energy, which the ecb can't control. central banks can only manage the demand side of the equation. not the supply side of the equation and one could argue it's a fool's errand to try to control that with rate hikes it's going to be difficult and especially now that we have the potential for financial accidents, there's real fragility there, i think the better course of action is to be prudent and thoughtful and go easy >> and the market is telling you what christine just said thanks to rick for that. you're the economist global economy, what are you doing f

largest military power in the world is the united states who forced the head of the ecb, christine lagarde. that's not politically correct to be expressed , she thought that vladimir zelensky was big water has already arrived in 2 dozen regions of russia from the nizhny novgorod region to the orenburg region, when should the peak of floods be expected, where it has already arrived, and where are they preparing? severe flooding also occurred in the east of turkey in a region that has not yet recovered from the devastating earthquakes. what are the implications there? vladimir putin will hold talks with his syrian counterpart bashar al-assad today . this morning, he, with a delegation of syrian politicians and military, laid a wreath at the tomb of the unknown soldier in the alexander garden. last time i remind you, the leaders of russia and syria met in september 21 , also in moscow well, in general, this is the eighth visit of bashar al-assad to our country since 2000, when he became president and us ships have nothing to do near the borders of russia, this is the statement i will make rus

let's take a view of what is happening in brussels and we have president lagarde giving testimony.ouple of lines confident in the banks liquidity at capital levels. the ecb has more groundcover based on the current baseline. she is talking about inflation. the ecb said -- ecb's determination on inflation is there. she is answering questions right now. this is what she had to say a couple moments ago. [video clip] >> i welcome the swift action and decisions taken by the swiss authorities. these actions are instrumental for restoring quarterly market conditions and ensuring financial stability. let me also remind that we are monitoring market developments closely and stand ready to respond as necessary to preserve price stability and financial stability in the euro area. guy: president lagarde speaking a few moments ago in france -- in front of the european parliament. she is still taking questions from lawmakers. we will update you on what she is saying. let's get back to our question of the day. it was a frantic and frenetic weekend. we have seen a solution potentially to the credi

i thought president lagarde did a decent job all things considered.arly a tense governing council meeting over the previous two days. clearly some officials. -- president lagarde set it herself, some officials did not want to hike. tom: also dealing with bankers that do not want to make tough decisions you do what you have to do. i thought it was interesting that they still model out some form of disinflation at one-year or two-year. that is an overarching theme to the equity market. the disinflation is in place according to the optimist. jonathan: we are talking about forecast into 2024. tom: 2025. where is credit suisse in 2025? jonathan: i pay this much attention to ecb forecasts right now. forecasts from any central bank are beyond next week. it's a problem for the fed. they do not have to just put out forecast for growth and inflation and unemployment vote forecast for where they think the policy rate should and will be by the year end. the problem is the previous s&p had the medium. at 5.1%. they can maybe leave it there and say we do not know w

what a communications exercise from madame lagarde. agenda. this is a meeting that happens regularly. obviously today, it will be all about banks. these will be the questions that lawmakers will put to her. that is the focus point for us, too. lisa: when we talk about confidence, have to drill into this one instrument a lot of people haven't heard of yet. 275 billion dollars of debt are now called into question after credit suisse's debt was written down by swiss authorities peered we are hearing pushback from european authorities, saying that equity has to get wiped out before these instruments. is there a bit of a tift emerging between european regulators and swiss regulators that acted alone? maria: i think you read it quite well. if you look at the statement last night, and to me it is very telling, but if you look at the statement yesterday and read between the lines, essentially what they said was thank you to switzerland and ubs for essentially stabilizing the situation, alongside repeating that european banks are solid and ther

of course you mentioned lagarde.say she's been a little, put it, all over the place so to speak. fair or not that seems to be the perception in terms of some of her comments. >> the "wall street journal" did an op-ed on it. >> wednesday the weakness that occurred in the regional banks in particular was a result of her comment. yesterday she had other things to say. i mean it's basically of the same theme, of course, which is we're going to do whatever we need to protect the system and depositors, but we do it on a case-by-case basis. >> i don't think it's been inconsistent. >> you are defending her. >> i'm trying to read into the language she's used. she said yesterday -- >> this has nothing to do with the particular business of the bank in question. it really is a judgment about whether or not the failure of the bank and the losses imposed on uninsured depositors threaten contagion that could undermine the broader banking system. >> basically there she was defending the move to insure uninsured depositors of svb ban

christine lagarde, the president _ monetary policy.f— monetary policy. christine lagarde, the president of the _ monetary policy. christine lagarde, the president of the european - the president of the european central bank. let's speak to azad zangana the senior european economist at investment company, schroders. thanks forjoining us. tell us why the ecb raised interest rates at this point?— the ecb raised interest rates at this oint? . ., ~ this point? european central bank has been trying — this point? european central bank has been trying tighten _ this point? european central bank has been trying tighten monetary| has been trying tighten monetary policy in order to reduce demand in the economy and then bring inflation down and with inflation still more than three times above its central target of 2% that challenge continues to be a big issue. at the last meeting they promised to raise interest rates by another half percent and so they decided to pull back today and it may have sent the wrong signal if they had done so, they had p

alix: right before these numbers, christine lagarde sat down with spanish tv. a half-point hike increase in march feels like a done deal. must stay restrictive for a while. hike some may continue but she doesn't know for how long or how high. the hawks still having that conversation because how else are they going to be handling these higher prices? guy: i think they have a problem in managing core as well. gas prices coming down, that will put more money in people's pockets which could support that core number. you of wage routes happening at the moment. europe has a more rigid labor market and it starts to get embedded in the system within those wage routes it's can be very hard e is in thejoining us now to discuss th, maria tadeo. fantastic interview yesterday and marcus ash -- marcus asked work -- marcus ash worth. it's clear the ecb is facing sticky core inflation. do they believe they can get this under control? maria: don't make me say out loud that question. if i do it fast there's no way the question will be answered. if you look at the core inflation

. >>> we're back ecb president christine lagarde has said the recent turmoil could help dampen demand and reduce inflation doing the work that would otherwise be done by monetary policy lagarde said inflation alone would suggest more hikes than needed, but impact of market instability on demand would have to be taken into account in its forecast >>> global borrowing enhanced seven-day dollar swaps the joint effort from top central banks is meant to ease funding stress and cash flow amid the turmoil in the banking sector two swiss banks and one eurozone institution borrowing. >>> the fed meeting kicks off today and facing a tough decision amid high inflation and lingering bank crisis. some investors and industry leaders are calling for a pause in rate hikes, the cme fed watch tool ses es -- sees a 75% hike of .25 let's get to our guest this is where you should watch investors should pay attention to money market flows and bank reserves if these get too low, the fed is guaranteed to make a hard pivot. do you think that will happen, sir? good morning >> good morning. thank you. that is w

madam lagarde is speaking, so we must reflect, follow the commentary we're the head of the ecb at this> the underlying inflation dynamic remains strong. we must and we will bring down inflation to target. times are very uncertain. the inflation level is still high. uncertainty around its path ahead has increased while more restricted credit conditions are part of the mechanism by which our tightening ultimately brings inflation back to target. we will make sure that the process will be orderly. we are neither committed to raise further, nor are we committed to hiking rates. there you go. make of that what you will. >> you mentioned the tech comment, wil. >> i did. there's a lot here. >> the greater role today played by future earnings such as tech could also make monetary transition more powerful. that's interesting. not a single sector which has arguably the most volatile sector on the expected part of future rates. >> yes. >> it's have interesting she's singled out the monetary policy. >> it's very detailed. she goes on to talk about if, for example, banks start to apply a larger int

lagarde says there is no trade-off between market conditions and financial stability.pected to meet with european officials and also speak before the european parliament twice. this is a meeting already on the agenda. the idea was to debrief decisions made last week, but we own of the questions going forward now will be about the banking sector and its resilience in europe. tom: maria tadeo in brussels. coming up, we will take a deep dive into this historic credit suisse deal in our banking breakdown special edition of "surveillance: early edition" anchored by francine lacqua in zurich. stay with us for that. this is bloomberg. ♪ these days, our households depend on the internet more and more. families grow, houses get smarter, and our demands on the internet increase. that's why we just boosted speeds for over 20 million xfinity customers, on us. so you get more of the speed you need for day and night streaming. more speed you need when you're work from homeing. and more speed you need as your family keeps growing. check in on your current speed through the xfinity ap

to hear christine lagarde say 50 basis points, give herself some optionality.n the data is as varied and uncertain and as unpredictable as it is, how much can we listen to hawkish rhetoric from madam lagarde and the other ecb speakers? sarah: i think they have given a pretty clear signal about what they intend to do for this month's meeting. 50 basis points. beyond that, the message is data dependency. that will be very much related to how the economy evolves and how these inflation pressures evolve. i think the ecb is concerned about the wage costs and the fact that in europe, labor markets tend to be slower to adjust to a weaker economic activity. we have had a very dramatic increase in ecb rates, in a relatively short space of time. they started raising rates in july. the impact of the rate hikes that we saw in the second half of last year are only going to start to be felt in the second half of this year. that has to be very much in policymakers minds as well. the risk of over tightening and driving the economy into a steeper downturn than is necessary, we

jamie: lagarde has been clear that they are focusing on a few things.s underlying inflation, core inflation. the other is financial stability, and the other is inflation forecasts. for the near term path, what matters is core inflation. we are expecting it to stay very elevated all the way through the summer, which mean the hawks will have plenty of room to push their agenda of higher interest rates. dani: is lagarde right to insist there is no trade-off between price stability and financial stability? jamie: we've heard her say it quite a few times now and she's right up to a point. when we are talking about liquidity problems in the banking sector, the ecb is able to deal with those well. what is not able to deal with is solvency problems. if rate hikes go so far that it tanks the economy and losses start to pile up, the ecb will not be able to do anything about that. there is severability there've only up to a point. dani: thank you very much jamie rush from bloomberg economics. today in this market, and started with euro strength and has turned to e

the head of the european central bank , christine lagarde, began talking to pranksters lexus and vovan who introduced themselves as ukrainian president zelensky, she complained that the west was unable to influence the situation. sanctions bite not as hard as we expected they still manage to sell a lot of oil and gas energy to other countries, except for those that have imposed sanctions and of course outside the eu when they sell to india china to the far east they manage to provide inflow of foreign currency. western sanctions failed to collapse the russian ruble, admitted agard, who dreamed of a deep recession for russia. the united states and europe are now being drawn into it after the collapse of the american bank , silicone or the swiss bank has staggered. crisis wiz, today, its shares fell by 25% and trades stopped in russia and close. no, moreover, according to the head of the european central bank, thanks to the skillful work of the head of the russian central bank or vera nabiullina. elvira, who i know is a very good head of the central bank, she is very fast realized the si

betsy: if you listen to christine lagarde, her comments were very strong and that they can fight bothssues at the same time. the tools are different. they went ahead with a 50 basis point increase. jon: we were referencing your time as a fed governor. we should provide context around that, the fact that you started in august 2008, weeks before lehman brothers collapsed come almost immediately there were massive decisions to make, including providing capital to aig to avoid collapse. looking back at those years, you talked about the need at times for the fed to act like a first responder. would you say it is in one of those times of need again? betsy: salute lee. the first responder -- absolutely. the first responder and bank deposits. there is no bank in the country that can withstand or run at the speed and magnitude that silicon valley had. that has nothing to do with how sound they are. they are well-capitalized and credit is good and earnings are strong so the banks are in as good a shape as they have been on, but a run on a bank is still a very difficult situation to manage and i

. >> ecb president christine lagarde says inflation is projected to remain too high for too long.d the u.s. banking system is stronger now than before the great recession. >> given the reforms that have taken place, and theri was aroun 2008 so i have clear recollection of what happened and what we had to do, we did reform the framework, we did agree on basal 3, we did increase the regulation and i think the banking sector is in a much, much stronger position than where it was back in 2008. >> more now from clare sebastian. >> reporter: despite the recent turmoil in the financial markets and despite this decision coming on the same day a major european bank credit suisse was forced to borrow more than $50 billion from swiss central bank, european central bank stuck to its guns going ahead with the h half percent rate rise. and christine lagarde was very clear, inflation at 8.5% is too high and they are not seeing enough progress on bringing it down. they are however she said closely monitoring the financial markets, keeping a close eye on whether banks tighten lending. but they hav

president lagarde did say while they're looking at stability there still focused on fighting inflationinflation in the u.s. has been stubborn. there is a basis for the fed to hike rates. you have to consider the effect. if the fed does not hike rates and it pauses it could be interpreted by some parts of the market as signs of concern. it would even be viewed as a start of a panic reaction. it is a tough call. we still think the fed will end up hiking rates by 25 basis points but at the same time highly it has enough liquidity privations and tools at its added disposal to support the u.s. banking sector. yvonne: what are the chances now we could be seeing a recession and for that, how do you come up with a portfolio or allocation? what is the investment strategy moving forward in your conversation with clients now? >> i think from our perspective we have in assigning around 75% probability of u.s. and europe in recession. if anything the events we have seen in the past week do lead us to believe a recession is imminent. we have been wondering where would the pace of rate hikes we have